BGS SGS SOMA JV v. NHPC LTD.

The Judgment of the Court was delivered by D

R. F. NARIMAN, J.

1Copy pinpoint1. Leave granted.

2Copy pinpoint2. Three appeals before us raise questions as to maintainability of appeals under Section 37 of the Arbitration and Conciliation Act, 1996 E (hereinafter referred to as “the Arbitration Act, 1996”), and, given the arbitration clause in these proceedings, whether the “seat” of the arbitration proceedings is New Delhi or Faridabad, consequent upon which a petition under Section 34 of the Arbitration Act, 1996 may be filed dependent on where the seat of arbitration is located. F

3Copy pinpoint3. At the outset, the facts in SLP (Civil) No.25618 of 2018 are set out as follows. On 16.01.2004, the Petitioner was awarded a contract for construction of Diversion Tunnels, Coffer Dams, Concrete Gravity Dams, Plunge Pools and Cutoff Walls of Subansri Lower Hydroelectric Project on river Subansri, with an installed capacity of 2000 MW, stated G to be the largest Hydropower project yet in India. The project site is located in the lower Subansri districts in the States of Assam and Arunachal Pradesh. Clause 67.3 of the agreement between the parties provides for dispute resolution through arbitration. Clause 67.3 reads as follows: H

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A “Any dispute in respect of which the Employer and the Contractor have failed to reach at an amicable settlement pursuant to Sub-Clause 67.1, shall be finally settled by arbitration as set forth below. The Arbitral Tribunal shall have full power to open up, review and revise any decision, opinion, instruction, determination, certificate or valuation of the Engineer. B (i) A dispute with an Indian Contractor shall be finally settled in accordance with the Indian Arbitration and Conciliation Act, 1996, or any statutory amendment thereof. The arbitral tribunal shall consist of 3 arbitrators, one each to be appointed by the Employer and the C Contractor. The third Arbitrator shall be chosen by the two Arbitrators so appointed by the Parties and shall act as Presiding arbitrator. In case of failure of the two arbitrators, appointed by the parties to reach upon a consensus within a period of 30 days from the appointment of the arbitrator appointed subsequently, the Presiding arbitrator shall be appointed by the President of the Institution of Engineers (India). For the purposes of this Sub-Clause, the term “Indian Contractor” means a contractor who is registered in India and is a juridic person created under Indian law as well as a joint venture between such a contractor and a Foreign Contractor. (ii) In the case of a dispute with a Foreign Contractor, the dispute shall be finally settled in accordance with the provisions of the Indian Arbitration and Conciliation Act, F 1996 and read with UNCITRAL Arbitration Rules. The arbitral tribunal shall consist of three Arbitrators, one each to be appointed by the Employer and the Contractor. The third Arbitrator shall be chosen by the two Arbitrators so appointed by the Parties and shall act as Presiding arbitrator. In case of failure of the two arbitrators appointed by the parties to reach a consensus within a period of 30 days from their appointment on the Presiding Arbitrator to be appointed subsequently, the Presiding arbitrator shall be appointed by the President of the Institution of Engineers (India). For the purposes of this Clause 67, the term “Foreign

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Contractor” means a contractor who is not registered A in India and is not a juridic person created under Indian Law. In case of any contradiction between Indian Arbitration and Conciliation Act, 1996 and UNCITRAL Arbitration Rules, the provisions in the Indian Arbitration and Conciliation Act, 1996 shall prevail. B (iii) Arbitration may be commenced prior to or after completion of the Works, provided that the obligations of the Employers, the Engineer, and the Contractor shall not be altered by reason of the arbitration being conducted during the progress of the Works. C xxx xxx xxx (v) If one of the parties fail to appoint its arbitrator in pursuance of sub-clause (i) and (ii) above, within 30 days after receipt of the notice of the appointment of its arbitrator by the other party, then the President of the D Institution of Engineers (India), both in cases of foreign contractors as well as Indian Contractors, shall appoint the arbitrator. A certified copy of the order of the President of Institution of Engineers (India), making such an appointment shall be furnished to each of the parties. E

(vi) Arbitration Proceedings shall be held at New Delhi/ Faridabad, India and the language of the arbitration proceedings and that of all documents and communications between the parties shall be English. F (vii) The decision of the majority of arbitrators shall be final and binding upon both parties. The cost and expenses of Arbitration shall be borne in such a manner as determined by the arbitral tribunal. However, the expenses incurred by each party in connection with the preparation, presentation etc. of its proceedings as also G the fees and expenses paid to the arbitrator appointed by such party on its behalf shall be borne by each party itself.”

4Copy pinpoint4. On 16.05.2011, a Notice of Arbitration was issued by the Petitioner to the Respondent, in regard to payment of compensation for H

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A losses suffered due to abnormal delays and additional costs as a result of hindrances caused by the Respondent. A three-member Arbitral Tribunal was constituted as per clause 67.3 of the agreement under the Arbitration Act, 1996. Pursuant thereto, the Petitioner filed its Statement of Claim seeking recovery of an amount of INR 986.60 crores plus CHF 1060619. Between August 2011 and August 2016, B seventy-one sittings of the Arbitral Tribunal took place at New Delhi. The Tribunal then delivered its unanimous award at New Delhi on 26.08.2016, by which the claims of the Petitioner aggregating to INR 424,81,54,096.29 were allowed, together with simple interest at 14% per annum till the date of actual payment. On 04.10.2016, in view of C certain computational and typographical errors in the arbitral award, the figure of 424,81,54,096.29 was rectified to INR 424,70,52,126.66. On 03.01.2017, being aggrieved by the arbitral award and the rectification thereto, the Respondent filed an application under Section 34 of the Arbitration Act, 1996 seeking to set aside these awards before the Court of the District and Sessions Judge, Faridabad, Haryana. On 28.04.2017, D the Petitioner filed an application under Section 151 read with Order VII Rule 10 of the Code of Civil Procedure, 1908 (hereinafter referred to as the “CPC”) and Section 2(1)(e)(i) of the Arbitration Act, 1996, seeking a return of the petition filed under Section 34 for presentation before the appropriate Court at New Delhi and/or the District Judge E at Dhemaji, Assam. In November, 2017, after the constitution of a Special Commercial Court at Gurugram, the Section 34 petition filed at Faridabad was transferred to the said Gurugram Commercial Court and numbered as Arbitration Case No.74 (CIS No. ARB/118/2017).

5Copy pinpoint5. On 21.12.2017, the Special Commercial Court, Gurugram F allowed the application of the Petitioner, and returned the Section 34 petition for presentation to the proper court having jurisdiction in New Delhi. On 15.02.2018, the Respondent filed an appeal under Section 37 of the Arbitration Act, 1996 read with Section 13(1) of the Commercial Courts Act, 2015 before the High Court of Punjab and Haryana at Chandigarh. On 12.09.2018, the impugned judgment was delivered by the Punjab and Haryana High Court, in which it was held that the appeal filed under Section 37 of the Arbitration Act, 1996 was maintainable, and that Delhi being only a convenient venue where arbitral proceedings were held and not the seat of the arbitration proceedings, Faridabad would have jurisdiction on the basis of the cause of action having arisen in part in Faridabad. As a result, the appeal was

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allowed and the judgment of the Special Commercial Court, Gurugram A was set aside.

6Copy pinpoint6. Dr. Abhishek Manu Singhvi, learned Senior Advocate appearing on behalf of the Petitioner in SLP (C) No.25618 of 2018, has assailed the impugned High Court judgment on both counts. According to him, on a combined reading of Section 13 of the B Commercial Courts Act, 2015 and Section 37 of the Arbitration Act, 1996, it becomes clear that Section 13 of the Commercial Courts Act, 2015 only provides the forum for challenge, whereas Section 37 of the Arbitration Act, 1996 - which is expressly referred to in the proviso to Section 13(1) of the Commercial Courts Act, 2015 - circumscribes the right of appeal. He contended that this when read with Section 5 of the Arbitration Act, 1996, makes it clear that only certain judgments and orders are appealable, and no appeal lies under any provision outside Section 37 of the Arbitration Act, 1996. He contended that the High Court was manifestly wrong when it said that the present appeal was appealable under Section 37(1)(c) of the Arbitration Act, 1996 as being an appeal against an order refusing to set aside an arbitral award under Section 34 of the Arbitration Act, 1996. According to Dr. Singhvi, an order which allows an application under Section 151 read with Order VII Rule 10 of the CPC can by no stretch of the imagination amount to an order refusing to set aside an arbitral award under Section 34 of the Arbitration Act, 1996. For this proposition, he strongly relied upon on our judgment in Kandla Export Corporation & Anr. v. M/s OCI Corporation & Anr. (2018) 14 SCC 715. On the second point, he read out the impugned judgment in detail, and stated that the ultimate conclusion that New Delhi was only a “venue” and not the “seat” of the arbitration was incorrect, as the parties have chosen to have sittings at New Delhi, as a result of which it is clear that the Arbitral Tribunal considered that the award made at New Delhi would be made at “the seat” of the arbitral proceedings between the parties. He further added that it was clear that even if both New Delhi and Faridabad had jurisdiction, New Delhi being the choice of the parties, the principle contained in Hakam Singh v. M/s. Gammon (India) Ltd., (1971) 1 G SCC 286, would govern. He referred in copious detail to many judgments of this Court, including the Five Judge Bench in Bharat Aluminium Co. (BALCO) v. Kaiser Aluminium Technical Service, Inc., (2012) 9 SCC 552, Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited & Ors., (2017) H

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A 7 SCC 678, and various other judgments to buttress his submissions. According to him, the recent judgment delivered in Union of India v. Hardy Exploration and Production (India) Inc. 2018 SCC Online SC 1640 queers the pitch, in that it is directly contrary to the Five Judge bench decision in BALCO (supra). It is only as a result of the confusion caused by judgments such as Hardy Exploration and Production B (India) Inc. (supra) that the impugned judgment has arrived at the wrong conclusion that New Delhi is not the “seat”, but only the “venue” of the present arbitral proceedings. He, therefore, in the course of his submissions argued that this confusion should be removed, and exhorted us to declare that Hardy Exploration and Production (India) Inc. C (supra) was not correctly decided, being contrary to the larger bench in BALCO (supra).

7Copy pinpoint7. Dr. Singhvi in the course of his submissions also referred pointedly to paragraph 96 of BALCO (supra), and argued that not only was the example given in the said paragraph contrary to the theory of concurrent jurisdiction propounded therein, but was also contrary to subsequent paragraphs in the said judgment, in which it was clearly held that a clause in an agreement stating the “seat” of arbitration is akin to an exclusive jurisdiction clause, which would put paid to any theory of concurrent jurisdiction. As a matter of fact, two subsequent decisions have understood the ratio of BALCO (supra) to be that once the “seat” is indicated in an arbitration agreement, it is akin to an exclusive jurisdiction clause, which would oust the jurisdiction of courts other than courts at the seat. For this purpose he expressly referred to and relied upon Reliance Industries Ltd. v. Union of India (2014) 7 SCC 603 F and Indus Mobile Distribution Pvt. Ltd. (supra).

8Copy pinpoint8. Shri Arunabh Chowdhury, appearing in SLP (Civil) No. 25848 of 2018, argued that unlike the first SLP argued by Dr. Singhvi, in his case, the Notice for Arbitration was sent to the Assam site-office of the Respondent, and not routed through the Assam office to be sent to G the Head Office at Faridabad, thereby making the observations based on Section 21 of the Arbitration Act,1996 in the impugned judgment inapplicable on the facts of his case. He supported Dr. Singhvi’s argument that the appeal filed under Section 37 of the Arbitration Act, 1996 would not be maintainable, and cited several judgments, which will be dealt with a little later. H

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9Copy pinpoint9. Shri Ankit Chaturvedi, appearing in SLP (Civil) No. 28062 of A 2018, stressed one important difference in the facts of his case, which is, that the arbitral award made in his case expressly referred to Section 31(4) of the Arbitration Act, 1996, and stated that the place of arbitration, as determined in accordance with Section 20 of the Arbitration Act, 1996, was New Delhi. Therefore, this being the “seat” as determined by the Arbitral Tribunal in this case, a challenge under Section 34 of the Arbitration Act, 1996 could only be made in the courts at New Delhi.

10Copy pinpoint10. Smt. Maninder Acharya, learned Additional Solicitor General, supported the judgment under appeal. She first argued that the reasoning of the impugned judgment, that an order passed under Section 151 read with Order VII Rule 10 of the CPC would amount to a refusal to set aside an arbitral award, is correct, and relied heavily upon a Division Bench judgment of the Delhi High Court in Antrix Corporation Ltd. v. Devas Multimedia Pvt. Ltd. 2018 SCC Online Del 9338 for this purpose. On the second point, she argued that the arbitration clause did not expressly state that either New Delhi or Faridabad was to be the seat of the Arbitral Tribunal. Therefore, the arbitration clause only referred to a convenient venue, and the fact that the sittings were held at New Delhi, therefore, would not make New Delhi the seat of the arbitration under Section 20(1) of the Arbitration Act, 1996. According to her, since the agreements in the present case were signed in E Faridabad, and since notices were sent by the Petitioners to the Respondent’s Faridabad office, part of the cause of action clearly arose in Faridabad, as a result of which the courts in Faridabad would be clothed with jurisdiction to decide a Section 34 application. She stressed the fact that in BALCO (supra), even assuming that New Delhi was F the seat of arbitration, both New Delhi and Faridabad would have concurrent jurisdiction - New Delhi being a neutral forum in which no part of the cause of action arose, and Faridabad being a chosen forum where a part of the cause of action has arisen. When read with Section 42 of the Arbitration Act, 1996, since the Court at Faridabad was first approached by filing an application under Section 34 of the Arbitration G Act,1996, that Court alone would have jurisdiction, as a result of which the impugned judgment ought to be affirmed. Maintainability of the appeals under Section 37 of the Arbitration Act, 1996 H

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11Copy pinpoint11. Section 37(1) of the Arbitration Act, 1996 reads as follows: “37. Appealable Orders.- (1) An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:- B (a) refusing to refer the parties to arbitration under section 8; (b) granting or refusing to grant any measure under section 9; C (c) setting aside or refusing to set aside an arbitral award under section 34.”

12Copy pinpoint12. Section 13 of the Commercial Courts Act, 2015 reads as follows: “13. Appeals from decrees of Commercial Courts and D Commercial Divisions.- (1) Any person aggrieved by the judgment or order of a Commercial Court below the level of a District Judge may appeal to the Commercial Appellate Court within a period of sixty days from the date of judgment or order. E (1A)Any person aggrieved by the judgment or order of a Commercial Court at the level of District Judge exercising original civil jurisdiction or, as the case may be, Commercial Division Bench of a High Court may appeal to the Commercial Appellate Division of that High Court within a period of sixty days from F the date of the judgment of order: Provided that an appeal shall lie from such orders passed by the Commercial Division or a Commercial Court that are specifically enumerated in Order XLIII of the Code of Civil Procedure, 1908 (5 of 1908) as amended by this Act and Section 37 of the G Arbitration and Conciliation Act, 1996 (26 of 1996). (2) Notwithstanding anything contained in any other law for the time being in force or Letters Patent of a High Court, no appeal shall lie from any other order or decree of a Commercial Division or Commercial Court otherwise than in accordance with the H provisions of the Act.”

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13Copy pinpoint13. The interplay between Section 37 of the Arbitration Act, 1996 A and Section 13 of the Commercial Courts Act, 2015, has been laid down in some detail in the judgment in Kandla Export Corporation (supra). The precise question that arose in Kandla Export Corporation (supra) was as to whether an appeal, which was not maintainable under Section 50 of the Arbitration Act,1996, is nonetheless maintainable under Section B 13(1) of the Commercial Courts Act, 2015. In this context, after setting out various provisions of the Commercial Courts Act, 2015 and the Arbitration Act, 1996, this Court held: “13. Section 13(1) of the Commercial Courts Act, with which we are immediately concerned in these appeals, is in two parts. C The main provision is, as has been correctly submitted by Shri Giri, a provision which provides for appeals from judgments, orders and decrees of the Commercial Division of the High Court. To this main provision, an exception is carved out by the proviso…” D

14Copy pinpoint14. The proviso goes on to state that an appeal shall lie from such orders passed by the Commercial Division of the High Court that are specifically enumerated under Order 43 of the Code of Civil Procedure Code, 1908, and Section 37 of the Arbitration Act. It will at once be noticed that orders that are not specifically enumerated under Order 43 CPC would, therefore, not be appealable, and appeals that are mentioned in Section 37 of the Arbitration Act alone are appeals that can be made to the Commercial Appellate Division of a High Court.

15Copy pinpoint15. Thus, an order which refers parties to arbitration under Section 8, not being appealable under Section 37(1)(a), would not be appealable under Section 13(1) of the Commercial Courts Act. Similarly, an appeal rejecting a plea referred to in sub-sections (2) and (3) of Section 16 of the Arbitration Act would equally not be appealable under Section 37(2)(a) and, therefore, under Section 13(1) of the Commercial Courts Act. G xxx xxx xxx

20. Given the judgment of this Court in Fuerst Day Lawson [Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 : (2011) 4 SCC (Civ) 178] , which Parliament is presumed to know when it enacted the Arbitration Amendment H

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A Act, 2015, and given the fact that no change was made in Section 50 of the Arbitration Act when the Commercial Courts Act was brought into force, it is clear that Section 50 is a provision contained in a self-contained code on matters pertaining to arbitration, and which is exhaustive in nature. It carries the negative import mentioned in para 89 of Fuerst Day B Lawson [Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 : (2011) 4 SCC (Civ) 178] that appeals which are not mentioned therein, are not permissible. This being the case, it is clear that Section 13(1) of the Commercial Courts Act, being a general provision vis-à-vis arbitration relating to appeals C arising out of commercial disputes, would obviously not apply to cases covered by Section 50 of the Arbitration Act.

21. However, the question still arises as to why Section 37 of the Arbitration Act was expressly included in the proviso to Section 13(1) of the Commercial Courts Act, which is equally a D special provision of appeal contained in a self-contained code, which in any case would be outside Section 13(1) of the Commercial Courts Act. One answer is that this was done ex abundanti cautela. Another answer may be that as Section 37 itself was amended by the Arbitration Amendment Act, 2015, which came into force on the same day as the Commercial E Courts Act, Parliament thought, in its wisdom, that it was necessary to emphasise that the amended Section 37 would have precedence over the general provision contained in Section 13(1) of the Commercial Courts Act. Incidentally, the amendment of 2015 introduced one more category into the category of appealable orders in the Arbitration Act, namely, a category F where an order is made under Section 8 refusing to refer parties to arbitration. Parliament may have found it necessary to emphasise the fact that an order referring parties to arbitration under Section 8 is not appealable under Section 37(1)(a) and would, therefore, not be appealable under Section 13(1) of the G Commercial Courts Act. Whatever may be the ultimate reason for including Section 37 of the Arbitration Act in the proviso to Section 13(1), the ratio decidendi of the judgment in Fuerst Day Lawson [Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 : (2011) 4 SCC (Civ) 178] would apply, and this being so, appeals filed under Section 50 of the Arbitration H Act would have to follow the drill of Section 50 alone.

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22. This, in fact, follows from the language of Section 50 itself. A In all arbitration cases of enforcement of foreign awards, it is Section 50 alone that provides an appeal. Having provided for an appeal, the forum of appeal is left “to the Court authorised by law to hear appeals from such orders”. Section 50 properly read would, therefore, mean that if an appeal lies under the said provision, then alone would Section 13(1) of the Commercial B Courts Act be attracted as laying down the forum which will hear and decide such an appeal. xxx xxx xxx

27. The matter can be looked at from a slightly different angle. C Given the objects of both the statutes, it is clear that arbitration itself is meant to be a speedy resolution of disputes between parties. Equally, enforcement of foreign awards should take place as soon as possible if India is to remain as an equal partner, commercially speaking, in the international community. In point of fact, the raison d’être for the enactment of the Commercial D Courts Act is that commercial disputes involving high amounts of money should be speedily decided. Given the objects of both the enactments, if we were to provide an additional appeal, when Section 50 does away with an appeal so as to speedily enforce foreign awards, we would be turning the Arbitration Act and the E Commercial Courts Act on their heads. Admittedly, if the amount contained in a foreign award to be enforced in India were less than Rs 1 crore, and a Single Judge of a High Court were to enforce such award, no appeal would lie, in keeping with the object of speedy enforcement of foreign awards. However, if, in the same fact circumstance, a foreign award were to be for F Rs 1 crore or more, if the appellants are correct, enforcement of such award would be further delayed by providing an appeal under Section 13(1) of the Commercial Courts Act. Any such interpretation would lead to absurdity, and would be directly contrary to the object sought to be achieved by the Commercial G Courts Act viz. speedy resolution of disputes of a commercial nature involving a sum of Rs 1 crore and over. For this reason also, we feel that Section 13(1) of the Commercial Courts Act must be construed in accordance with the object sought to be achieved by the Act. Any construction of Section 13 of the Commercial Courts Act, which would lead to further delay, H

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A instead of an expeditious enforcement of a foreign award must, therefore, be eschewed. Even on applying the doctrine of harmonious construction of both statutes, it is clear that they are best harmonised by giving effect to the special statute i.e. the Arbitration Act, vis-à-vis the more general statute, namely, the Commercial Courts Act, being left to operate in spheres other than arbitration.”

14. Given the fact that there is no independent right of appeal under Section 13(1) of the Commercial Courts Act, 2015, which merely provides the forum of filing appeals, it is the parameters of Section 37 of the Arbitration Act,1996 alone which have to be looked at in order to determine whether the present appeals were maintainable. Section 37(1) makes it clear that appeals shall only lie from the orders set out in sub-clauses (a), (b) and (c) and from no others. The pigeonhole that the High Court in the impugned judgement has chosen to say that the appeals in the present cases were maintainable is sub-clause (c). D According to the High Court, even where a Section 34 application is ordered to be returned to the appropriate Court, such order would amount to an order “refusing to set aside an arbitral award under Section 34”.

15. Interestingly, under the proviso to Section 13(1A) of the E Commercial Courts Act, 2015, Order XLIII of the CPC is also mentioned. Order XLIII Rule(1)(a) reads as follows: “1. Appeal from orders.- An appeal shall lie from the following orders under the provisions of Section 104, namely- (a)an order under Rule 10 of Order VII returning a plaint to be presented to the proper Court except where the procedure specified in rule 10A of Order VII has been followed;”

16Copy pinpoint16. This provision is conspicuous by its absence in Section 37 of the Arbitration Act, 1996, which alone can be looked at for the purpose of filing appeals against orders setting aside, or refusing to set aside awards under Section 34. Also, what is missed by the impugned judgment is the words “under Section 34”. Thus, the refusal to set aside an arbitral award must be under Section 34, i.e., after the grounds set out in Section 34 have been applied to the arbitral award in question, and after the Court has turned down such grounds. Admittedly, on the facts of these cases, there was no adjudication under Section 34 of

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the Arbitration Act, 1996 - all that was done was that the Special A Commercial Court at Gurugram allowed an application filed under Section 151 read with Order VII Rule 10 CPC, determining that the Special Commercial Court at Gurugram had no jurisdiction to proceed further with the Section 34 application, and therefore, such application would have to be returned to the competent court situate at New Delhi. B

17Copy pinpoint17. Shri Anurabh Chowdhury referred to a number of judgments in which a well-settled proposition was elucidated, i.e. that an appeal is a creature of statute, and must either be found within the four corners of the statute, or not be there be at all. In support thereof, he referred to Municipal Corporation of Delhi & Ors. v. International C Security & Intelligence Agency Ltd. (2004) 3 SCC 250 (at paragraphs 14 and 15), and Arcot Textile Mills Ltd. v. Regional Provident Fund Commissioner and Ors. (2013) 16 SCC 1 (at paragraph 20). He also referred to a recent Delhi High Court judgment reported as South Delhi Municipal Corporation v. Tech Mahindra EFA (OS) (Comm.) 3 of 2019, in which the Delhi High Court held that an order of a Single Judge, which directed the deposit of 50% of the awarded amount, would not be appealable under Section 37 of the Arbitration Act, 1996 read with the Commercial Courts Act, 2015. In the course of discussion the Delhi High Court said: “12. In view of the above discussions, we conclude that the present appeal is not maintainable. The appellant’s remedy clearly lies elsewhere. An attempt was made to urge that no litigant can be deprived of remedy if there is a grievance: ubi jus ibi remedium; however, that argument is wholly without substance because an appeal, it has been repeatedly emphasised, is a specific creation of statute and cannot be claimed as a matter of right. This was explained pithily in Ganga Bai v. Vijay Kumar, (1974) 2 SCC 393, in the following terms: “There is a basic distinction between the right of suit and the right of appeal. There is an inherent right in every person to bring suit of a civil nature and unless the suit is barred by statute one may, at one’s peril, bring a suit of one’s choice. It is no answer to a suit howsoever frivolous the claim, that the law confers no right to sue. A suit for its maintainability requires no authority of law and it is enough that no statute bars the suit. But the position in regard to appeals is quite the opposite. The right of appeal H

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A inheres in no one and therefore an appeal for its maintainability must have the clear authority of law. That explains why the right of appeal is described as a creature of statute.

13. In view of the above discussion, it is held that the present appeal is plainly not maintainable by virtue of provisions of the B Commercial Courts Act, 2015; the appeal is therefore dismissed. No costs.”

18Copy pinpoint18. Shri Chowdhury also referred to another Delhi High Court judgment reported as Hamanprit Singh Sidhu v. Arcadia Shares & Stock Brokers Pvt. Ltd 2016 234 DLT 30 (DB), in which a learned C Single Judge of the Delhi High Court allowed an application for condonation of delay in filing a Section 34 petition. The Division Bench, in holding that an appeal against such an order would not be maintainable under Section 37 of the Arbitration Act, 1996, read with the Commercial Courts Act, 2015 held: D “10. Coming to Section 37(1), it is evident that an appeal can lie from Coming to Section 37(1), it is evident that an appeal can lie from only the orders specified in clauses (a), (b) or (c). In other words, an appeal under Section 37 would only be maintainable against (a) an order refusing to refer the parties to arbitration under Section 8 of the A&C Act; (b) an order granting or refusing to grant any measure under Section 9 of the A&C Act; or (c) an order setting aside or refusing to set aside an arbitral award under Section 34 of the A&C Act. The impugned order is clearly not relatable to Sections 8 or 9 of the A&C Act. It was sought to be contended by the learned counsel for the appellant that the present appeal would fall within Section 37(1) (c) which relates to an order “setting aside” or “refusing to set aside” an arbitral award under Section 34. We are unable to accept this proposition. By virtue of the impugned order, the arbitral award dated 10.09.2013 has not been set aside. Nor has the court, at this stage, refused to set aside the said arbitral award under Section 34 of the A&C Act. In fact, the appellant in whose favour the award has been made, would only be aggrieved if the award were to have been set aside in whole or in part. That has not happened. What the learned single Judge has done is to have condoned the delay in re-filing of the petition under Section 34. H This has not, in any way, impacted the award.”

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19Copy pinpoint19. The reasoning in this judgment commends itself to us, as a A distinction is made between judgments which either set aside, or refuse to set aside, an arbitral award after the court applies its mind to Section 34 of the Arbitration Act, 1996, as against preliminary orders of condonation of delay, which do not in any way impact the arbitral award that has been assailed. B

20Copy pinpoint20. However, Smt. Acharya relied heavily upon the Division Bench judgment of the Delhi High Court in Antrix Corporation Ltd. (supra). On the facts of that case, on 28.02.2017, a learned Single Judge of the Delhi High Court ruled that Antrix’s petition under Section 9 of the Arbitration Act, 1996 before the Bangalore Court was not maintainable, and that Devas’ petition under Section 9 was maintainable, the bar under Section 42 of the Arbitration Act, 1996 being inapplicable. The order also held that consequently, Antrix’s petition under Section 34 of the Arbitration Act, 1996 before the Bangalore City Civil Court would not be maintainable, inasmuch as Devas’ petition filed in Delhi under Section 9 was filed earlier. The learned Single Judge then listed the matter for hearing on merits and directed Antrix to file an affidavit of an authorised officer, enclosing therewith its audited Balance Sheets, and Profit and Loss Accounts for the past three years. Antrix then appealed against this order, to which a preliminary objection was taken, stating that this appeal would not be maintainable under Section 37 of the Arbitration Act, 1996. After setting out Section 13 of the Commercial E Courts Act, 2015 and Sections 37 and 42 of the Arbitration Act, 1996, the Division Bench noticed Hamanprit Singh Sidhu (supra) in paragraph 39, without at all adverting to paragraph 10 of the judgment (which is set out hereinabove). Thereafter, the Court held as follows: “42. While undeniably, the Learned Single Judge in the impugned order has not decided the Section 9 petition finally and had listed the matter for hearing on merits, Antrix states that the impugned order is indistinguishable from an order under Section 9. Devas however, argued that the sequence of events has not been completed. Antrix should face an adverse order under Section 9 before it can approach this court in appeal. On this issue, significant reliance has been placed on the decision of the Madras High Court in Samson Maritime (supra). In that case, the Court held: “Learned counsel appearing for the respondent made an attempt to contend that the application seeking for furnishing H

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A of details of assets cannot be construed as an interim measure or interim relief contemplated under section 9 of the said Act. I am not convinced to accept the said contention for the reason that those details are sought for by the applicant only to seek for consequential or follow up relief in the event of the respondent’s failure to furnish securities. B Therefore, as the relief sought for in this application is having a direct bearing on the relief sought for in the other applications seeking for furnishing securities, it cannot be said that this relief seeking for details of the assets is outside the scope of Section 9. Therefore, I find that the application filed seeking for details of the assets is also maintainable.”

43. The Court in Samson Maritime (supra) reasoned that an application seeking for furnishing of details of assets would also amount to an interim measure under Section 9, because the reason that those details are sought are only to seek consequential or follow up relief in the event of the respondent’s failure to furnish securities. Therefore, an order mandating a party to disclose his assets or file his accounts would also be an interim measure within the meaning of Section 9. In this case, through Paragraph 57 of the impugned order, the Learned Single Judge had directed Antrix to file an affidavit of an authorised officer, enclosing therewith its audited balance sheets and profit and loss accounts for the past three years. Keeping in mind the view of the Court in Samson Maritime (supra), which this Court is in agreement with, this would also in effect be a Section 9 order as those details are sought for the purpose of adjudicating whether consequential relief could be given to Devas of securing the amount due from the arbitral award against Antrix. Moreover, this Court cannot take a doctrinaire and unbending approach in this matter, when it is clear that Antrix has suffered all but one remaining blow through the impugned order, and therefore, the Court should not wait till it suffers the final blow (that of the final G Section 9 order) before it can assume jurisdiction over the appeal. The court’s direction to Antrix furnish an affidavit along with the particulars sought, is to aid its order with respect to a possible distraint, attachment or further such consequential order towards interim relief. Such an order would not be made unless the court H directs this as a prelude, or important step towards the inevitable

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interim order, which would be just consequential. Therefore, the A Court finds that Antrix’s appeal against the impugned order is maintainable.

44. This court also finds merit in Antrix’s argument that as regards the single judge’s observations that the Bangalore court cannot proceed with the matter, the impugned order is really final. B It precludes in effect, Antrix from proceeding with its Section 34 petition before that court (in turn based on the pending Section 9 petition before that court). If Antrix were to accept the ruling, the effect would be to denude the Bangalore court of jurisdiction. It was contended-and correctly, in this court’s opinion that C whereas a court acts within jurisdiction in deciding whether it has or does not have jurisdiction over a cause of a matter, the declaration by it about the lack of jurisdiction of another court, based on the appreciation of the matter before the latter court is undeniably an adverse order. Allowing that to stand would prejudice Antrix for all times.” D

21Copy pinpoint21. It can be seen that the reasoning in this judgment would have no application to the facts of the present case. The Division Bench held that directing Antrix to file an affidavit, enclosing therewith its audited Balance Sheets and Profit and Loss Account for the last three years, is itself an interim order passed under Section 9 of the Arbitration Act, E

1996. The further reasoning of the Court that the direction to Antrix to furnish an affidavit is to aid a future interim order, which would be just consequential, does not commend itself to us. A step towards an interim order would not amount to granting, or refusing to grant, any measure under Section 9 of the Arbitration Act, 1996. The case is also distinguishable for the reason that, as regards the Bangalore Court, which cannot proceed further with the matter, the impugned order therein is really final and would, therefore, also be appealable under Section 37. For all these reasons, this judgment is wholly distinguishable and would not apply to the facts of the present case. We may also advert to the fact that our judgment in Kandla (supra) was delivered on 07.02.2018, and was missed by the Division Bench in Antrix Corporation Ltd. (supra), as the Division Bench had reserved judgment on 06.12.2017, even though it ultimately pronounced the judgment on 30.05.2018. The judgment in South Delhi Municipal Corporation (supra) was decided after reference was made to H

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A Kandla (supra), resulting in a deposit order being held to be not appealable under Section 37 of the Arbitration Act, 1996.

22Copy pinpoint22. It is clear, therefore, that the appeals filed in the present case do not fall within Section 37 of the Arbitration Act,1996 and are not maintainable. B

23Copy pinpoint23. We now examine the second part of the challenge made by the Petitioners to the impugned judgment, which relates to the determination of the “seat” of the arbitral proceedings between the parties. The impugned judgment of the Punjab and Haryana High Court referred to BALCO (supra) and Indus Mobile Distribution Pvt. C Ltd. (supra), and other judgments of this Court, in order to arrive at the conclusion that the arbitration clause in the present case does not refer to the “seat” of arbitration, but only refers to the “venue” of arbitration. Consequently, the impugned judgment holds that since a part of the cause of action had arisen in Faridabad, and the Faridabad D Commercial Court was approached first, the Faridabad Court alone would have jurisdiction over the arbitral proceedings, and the courts at New Delhi would have no such jurisdiction. The correctness of these propositions has been vehemently assailed before us, and it is therefore important to lay down the law on what constitutes the “juridical seat” of arbitral proceedings, and whether, once the seat is delineated by the E arbitration agreement, courts at the place of the seat would alone thereafter have exclusive jurisdiction over the arbitral proceedings. The juridical seat of the arbitral proceedings

24Copy pinpoint24. The Arbitration Act, 1940 did not refer to the “juridical seat” F of the arbitral proceedings at all. Under the scheme of the Arbitration Act, 1940, Section 14 stated as follows: “14. Award to be signed and filed.- (1) When the arbitrators or umpire have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and award. (2) The arbitrators or umpire shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the Court and upon

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payment of the fees and charges due in respect of the arbitration and award and of the costs and charges of filing the award, cause the award or a signed copy of it, together with any depositions and documents which may have been taken and proved before them, to be filed in Court, and the Court shall thereupon give notice to the parties of the filing of the award. (3) Where the arbitrators or umpire state a special case under clause (b) of Section 13, the Court, after giving notice to the parties and hearing them, shall pronounce its opinion thereon and such opinion shall be added to, and shall form part of, the award.

25Copy pinpoint25. When the award was signed and filed in Court, a judgment in terms of the award had then to be made as follows: “17. Judgment in terms of award.- Where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgement according to the award, and upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such a decree except on the ground that it is in excess of, or not otherwise in accordance with, the award.”

26Copy pinpoint26. It was in this setting that “Court” was defined by Section 2(c) of the Arbitration Act, 1940 as follows: F “2. Definitions.- In this Act, unless there is anything repugnant in the subject or the context, xxx xxx xxx (c)“Court” means a Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if the same G had been the subject-matter of a suit, but does not, except for the purpose of arbitration proceedings under Section 21, include a Small Cause Court;”

27Copy pinpoint27. Section 31, which dealt with the Court in which an award may be filed then stated as follows: H

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A “31. Jurisdiction. (1) Subject to the provisions of this Act, an award may be filed in any Court having jurisdiction in the matter to which the reference relates. (2) Notwithstanding anything contained in any other law for the time being in force and save as otherwise provided in this Act, all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement- or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be, filed, and by no other Court. (3) All applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the Court where the award has been, or may be, filed, and to no other Court. (4) Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, where in any reference any application under this Act has been made in a Court competent to entertain it, that E Court alone shall have jurisdiction over the arbitration proceedings-, and all subsequent applications arising, out of that reference, and the arbitration proceedings shall be made in that Court and in no other Court.”

28Copy pinpoint28. It will be noticed that in this statutory setting, the “place” in F which the award is made is not referred to at all. Given this fact, the “Court” was defined as any Civil Court having jurisdiction to decide questions forming the subject matter of the reference to arbitration if the same had been the subject matter of a suit.

29Copy pinpoint29. The UNCITRAL Model Law on International Commercial G Arbitration (as adopted by the United Nations Commission on International Trade Law on 21 June 1985) (hereinafter referred to as the “UNCITRAL Model Law”) was then adopted by this country. The UNCITRAL Model Law introduced the concept of “place” or “seat” of the arbitral proceedings as follows:

H “Article 1. Scope of application

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xxx xxx xxx A (2) The provisions of this Law, except articles 8, 9, 35 and 36, apply only if the place of arbitration is in the territory of this State. xxx xxx xxx Article 2. Definitions and rules of interpretation B xxx xxx xxx (c) “court” means a body or organ of the judicial system of a State; xxx xxx xxx C Article 6. Court or other authority for certain functions of arbitration assistance and supervision The functions referred to in articles 11(3), 11(4), 13(3), 14, 16(3) and 34(2) shall be performed by ... [Each State enacting this model law specifies the court, courts or, where referred to therein, other authority competent to perform these functions.] D

xxx xxx xxx Article 20. Place of arbitration (1) The parties are free to agree on the place of arbitration. Failing such agreement, the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties. (2) Notwithstanding the provisions of paragraph (1) of this article, the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of goods, other property or documents. xxx xxx xxx G Article 31. Form and contents of award xxx xxx xxx (3) The award shall state its date and the place of arbitration as determined in accordance with article 20(1). The award shall be deemed to have been made at that place.” H

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30Copy pinpoint30. The Arbitration Act, 1996 repealed the Arbitration Act, 1940. As is stated in its preamble, the Arbitration Act, 1996 adopted provisions of the UNCITRAL Model Law, as they had made a significant contribution to the establishment of a unified legal framework for the fair and efficient settlement of disputes arising in international commercial relations. B

31Copy pinpoint31. The Arbitration Act, 1996 refers to “the place” of arbitration and defines ‘Court’, and indicates which Courts have jurisdiction in relation to arbitral proceedings in several sections in Part I. Section 2(1)(e) and Section 2(2) of the Arbitration Act, 1996 are as follows: C “2. Definitions.- (1) In this Part, unless the context otherwise requires,- xxx xxx xxx (e) “Court” means- D (i) in case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes; (ii) in the case of international commercial arbitration, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of a suit if the same had been the subject-matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court; G xxx xxx xxx (2) This part shall apply where the place of arbitration is in India. Provided that subject to an agreement to the contrary, the provisions of sections 9, 27 and clause (a) of sub-section (1) and H sub-section (3) of Section 37 shall also apply to international

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commercial arbitration, even if the place of arbitration is outside A India, and an arbitral award made or to be made in such place is enforceable and recognised under the provisions of Part II of this Act.

32Copy pinpoint32. Sections 20, 31(4) and 42 of the Arbitration Act, 1996 read as follows: B “20. Place of Arbitration.- (1) The parties are free to agree on the place of arbitration. (2) Failing any agreement referred to in sub-section (1), the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties. (3) Notwithstanding sub-section (1) or sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property.” “31. Form and contents of arbitral award.- xxx xxx xxx E (4) The arbitral award shall state its date and the place of arbitration as determined in accordance with section 20 and the award shall be deemed to have been made at that place.” “42. Jurisdiction.- Notwithstanding anything contained elsewhere in this Part or any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in any Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and no other Court.”

33Copy pinpoint33. It will thus be seen that the new provisions contained in Sections 20 and 31(4) of the Arbitration Act, 1996 are a replication of Articles 20 and 31(3) of the UNCITRAL Model Law, in which pride H

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A of place is given to the juridical seat of the arbitral proceedings. However, the definition of “court” in Section 2(1)(e) of the Arbitration Act, 1996 continues the definition contained in the Arbitration Act, 1940, but replaces any and every civil court by only the principal civil court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary civil jurisdiction. Section 42 of the Arbitration B Act, 1996 also substantially follows the drill of Section 31(4) of the Arbitration Act, 1940.

34Copy pinpoint34. It can thus be seen that given the new concept of “juridical seat” of the arbitral proceedings, and the importance given by the Arbitration Act, 1996 to this “seat”, the arbitral award is now not only to state its date, but also the place of arbitration as determined in accordance with Section 20. However, the definition of “Court” contained in Section 2(1)(c) of the Arbitration Act, 1940, continued as such in the Arbitration Act, 1996, though narrowed to mean only principal civil court and the High Court in exercise of their original ordinary civil jurisdiction. Thus, the concept of juridical seat of the arbitral proceedings and its relationship to the jurisdiction of courts which are then to look into matters relating to the arbitral proceedings - including challenges to arbitral awards - was unclear, and had to be developed in accordance with international practice on a case by case basis by this Court.

35Copy pinpoint35. Some of the early decisions of this Court did not properly distinguish between “seat” and “venue” of an arbitral proceeding. The Five Judge Bench in BALCO (supra) dealt with this problem as follows: “75. We are also unable to accept the submission of the learned counsel for the appellants that the Arbitration Act, 1996 does not F make seat of the arbitration as the centre of gravity of the arbitration. On the contrary, it is accepted by most of the experts that in most of the national laws, arbitrations are anchored to the seat/place/situs of arbitration. Redfern in Para 3.54 concludes that “the seat of the arbitration is thus intended to be its centre of gravity.” [Blackaby, Partasides, Redfern and Hunter G (Eds.), Redfern and Hunter on International Arbitration (5th Edn., Oxford University Press, Oxford/New York 2009).] This, however, does not mean that all the proceedings of the arbitration have to take place at the seat of the arbitration. The arbitrators at times hold meetings at more convenient locations. This is H necessary as arbitrators often come from different countries. It

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may, therefore, on occasions be convenient to hold some of the A meetings in a location which may be convenient to all. Such a situation was examined by the Court of Appeal in England in Naviera Amazonica Peruana S.A. v. Compania International de Seguros del Peru [(1988) 1 Lloyd’s Rep 116 (CA)] wherein at p. 121 it is observed as follows: B “The preceding discussion has been on the basis that there is only one ‘place’ of arbitration. This will be the place chosen by or on behalf of the parties; and it will be designated in the arbitration agreement or the terms of reference or the minutes of proceedings or in some other way as the place or ‘seat’ of the arbitration. This does not mean, however, that the C Arbitral Tribunal must hold all its meetings or hearings at the place of arbitration. International commercial arbitration often involves people of many different nationalities, from many different countries. In these circumstances, it is by no means unusual for an Arbitral Tribunal to hold meetings—or even hearings—in a place other than the designated place of arbitration, either for its own convenience or for the convenience of the parties or their witnesses…. It may be more convenient for an Arbitral Tribunal sitting in one country to conduct a hearing in another country — for instance, for the purpose of taking evidence…. In such circumstances each move of the Arbitral Tribunal does not of itself mean that the seat of arbitration changes. The seat of arbitration remains the place initially agreed by or on behalf of the parties.”

76. It must be pointed out that the law of the seat or place where the arbitration is held, is normally the law to govern that arbitration. The territorial link between the place of arbitration and the law governing that arbitration is well established in the international instruments, namely, the New York Convention of 1958 and the UNCITRAL Model Law of 1985. It is true that the terms “seat” and “place” are often used interchangeably. G In Redfern and Hunter on International Arbitration [Blackaby, Partasides, Redfern and Hunter (Eds.), Redfern and Hunter on International Arbitration (5th Edn., Oxford University Press, Oxford/New York 2009).] (Para 3.51), the seat theory is defined thus: “The concept that an arbitration is governed by the law of the place in which it is held, which is the ‘seat’ (or H

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A ‘forum’ or locus arbitri) of the arbitration, is well established in both the theory and practice of international arbitration. In fact, the Geneva Protocol, 1923 states: “2. The arbitral procedure, including the constitution of the Arbitral Tribunal, shall be governed by the will of the parties and by the law of the country in whose territory the arbitration takes place.” The New York Convention maintains the reference to “the law of the country where the arbitration took place” [Article V(1)(d)] and, synonymously to “the law of the country where the award is made” [Articles V(1)(a) and (e)]. The aforesaid observations clearly show that the New York Convention continues the clear territorial link between the place of arbitration and the law governing that arbitration. The author further points out that this territorial link is again maintained in the Model Law which provides in Article 1(2) that: D “1. (2) the provision of this Law, except Articles 8, 9, 35 and 36, apply only if the place of arbitration is in the territory of the State.” Just as the Arbitration Act, 1996 maintains the territorial link E between the place of arbitration and its law of arbitration, the law in Switzerland and England also maintain a clear link between the seat of arbitration and the lex arbitri. The Swiss Law states: “176(I). (1) The provision of this chapter shall apply to any arbitration if the seat of the Arbitral Tribunal is in F Switzerland and if, at the time when the arbitration agreement was concluded, at least one of the parties had neither its domicile nor its habitual residence in Switzerland.” [See the Swiss Private International Law Act, 1987, Ch. 12, Article 176 (I)(1).] These observations were subsequently followed in Union of India v. McDonnell Douglas Corpn. [(1993) 2 Lloyd’s Rep 48] G xxx xxx xxx

95. Learned Counsel for the Appellants have submitted that Section 2(1)(e), Section 20 and Section 28 read with Section 45 and Section 48(1)(e) make it clear that Part I is not limited only H to arbitrations which take place in India. These provisions indicate

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that Arbitration Act, 1996 is subject matter centric and not exclusively seat centric. Therefore, “seat” is not the “centre of gravity” so far as the Arbitration Act, 1996 is concerned. We are of the considered opinion that the aforesaid provisions have to be interpreted by keeping the principle of territoriality at the forefront. We have earlier observed that Section 2(2) does not make Part I applicable to arbitrations seated or held outside India. In view of the expression used in Section 2(2), the maxim expressum facit cessare tacitum, would not permit by interpretation to hold that Part I would also apply to arbitrations held outside the territory of India. The expression “this Part shall apply where the place of arbitration is in India” necessarily excludes application of Part I to arbitration seated or held outside India. It appears to us that neither of the provisions relied upon by the Learned Counsel for the Appellants would make any section of Part I applicable to arbitration seated outside India. It will be apposite now to consider each of the aforesaid provisions in turn.

96. Section 2(1)(e) of the Arbitration Act, 1996 reads as under: “2. Definitions (1) In this Part, unless the context otherwise requires E (e) “Court” means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject matter of the arbitration if the same had been the subject matter of a suit, but does not include any F civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes.” We are of the opinion, the term “subject matter of the arbitration” cannot be confused with “subject matter of the suit”. The term “subject matter” in Section 2(1)(e) is confined to Part I. It has a G reference and connection with the process of dispute resolution. Its purpose is to identify the courts having supervisory control over the arbitration proceedings. Hence, it refers to a court which would essentially be a court of the seat of the arbitration process. In our opinion, the provision in Section 2(1)(e) has to be construed keeping in view the provisions in Section 20 which give H

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A recognition to party autonomy. Accepting the narrow construction as projected by the Learned Counsel for the Appellants would, in fact, render Section 20 nugatory. In our view, the legislature has intentionally given jurisdiction to two courts i.e. the court which would have jurisdiction where the cause of action is located and the courts where the arbitration takes place. This was B necessary as on many occasions the agreement may provide for a seat of arbitration at a place which would be neutral to both the parties. Therefore, the courts where the arbitration takes place would be required to exercise supervisory control over the arbitral process. For example, if the arbitration is held in Delhi, C where neither of the parties are from Delhi, (Delhi having been chosen as a neutral place as between a party from Mumbai and the other from Kolkata) and the tribunal sitting in Delhi passes an interim order Under Section 17 of the Arbitration Act, 1996, the appeal against such an interim order under Section 37 must lie to the Courts of Delhi being the Courts having supervisory jurisdiction over the arbitration proceedings and the tribunal. This would be irrespective of the fact that the obligations to be performed under the contract were to be performed either at Mumbai or at Kolkata, and only arbitration is to take place in Delhi. In such circumstances, both the Courts would have jurisdiction, i.e., the Court within whose jurisdiction the subject matter of the suit is situated and the courts within the jurisdiction of which the dispute resolution, i.e., arbitration is located. xxx xxx xxx

98. We now come to Section 20, which is as under: F

20. Place of arbitration (1) The parties are free to agree on the place of arbitration. (2) Failing any agreement referred to in Sub-section (1), the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties. (3) Notwithstanding Sub-section (1) or Sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses,

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experts or the parties, or for inspection of documents, A good or other property.” A plain reading of Section 20 leaves no room for doubt that where the place of arbitration is in India, the parties are free to agree to any “place” or “seat” within India, be it Delhi, Mumbai etc. In the absence of the parties’ agreement thereto, Section 20(2) B authorizes the tribunal to determine the place/seat of such arbitration. Section 20(3) enables the tribunal to meet at any place for conducting hearings at a place of convenience in matters such as consultations among its members for hearing witnesses, experts or the parties. C

99. The fixation of the most convenient “venue” is taken care of by Section 20(3). Section 20, has to be read in the context of Section 2(2), which places a threshold limitation on the applicability of Part I, where the place of arbitration is in India. Therefore, Section 20 would also not support the submission of the extra-territorial applicability of Part I, as canvassed by the Learned Counsel for the Appellants, so far as purely domestic arbitration is concerned.” (emphasis supplied)

36Copy pinpoint36. The Court then went on to refer to several English judgments and specifically italicised several parts of the judgment in Roger Shashoua & Ors. v. Mukesh Sharma [2009] EWHC 957 (Comm) as follows: “110. Examining the fact situation in the case, the Court F observed as follows: The basis for the court’s grant of an anti-suit injunction of the kind sought depended upon the seat of the arbitration. An agreement as to the seat of an arbitration brought in the law of that country as the curial law and was analogous to an G exclusive jurisdiction clause. Not only was there agreement to the curial law of the seat, but also to the Courts of the seat having supervisory jurisdiction over the arbitration, so that, by agreeing to the seat, the parties agreed that any challenge to an interim or final award was to be made only in the courts of the place designated as the seat of the arbitration. H

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A Although, ‘venue’ was not synonymous with ‘seat’, in an arbitration clause which provided for arbitration to be conducted in accordance with the Rules of the ICC in Paris (a supranational body of rules), a provision that ‘the venue of arbitration shall be London, United Kingdom’ did amount to the designation of a juridical seat...” B In Paragraph 54, it is further observed as follows: There was a little debate about the possibility of the issues relating to the alleged submission by the claimants to the jurisdiction of the High Court of Delhi being heard by that court, because it was best fitted to determine such issues under Indian Law. Whilst I found this idea attractive initially, we are persuaded that it would be wrong in principle to allow this and that it would create undue practical problems in any event. On the basis of what I have already decided, England is the seat of the arbitration and since this carries with it something akin to an exclusive jurisdiction clause, as a matter of principle the foreign court should not decide matters which are for this Court to decide in the context of an anti-suit injunction. In making the aforesaid observations, the Court relied on judgments of the Court of Appeal in C v. D (2007) EWCA Civ E 1282 (CA).” (emphasis in original)

37Copy pinpoint37. Finally, the conclusion drawn in paragraph 116 was as follows: “116. The legal position that emerges from a conspectus of all F the decisions, seems to be, that the choice of another country as the seat of arbitration inevitably imports an acceptance that the law of that country relating to the conduct and supervision of arbitrations will apply to the proceedings

38Copy pinpoint38. Also, in paragraph 123, the Court held as follows: G “123. Thus, it is clear that the regulation of conduct of arbitration and challenge to an award would have to be done by the courts of the country in which the arbitration is being conducted. Such a court is then the supervisory court possessed of the power to annul the award. This is in keeping with the scheme of the H international instruments, such as the Geneva Convention and the

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New York Convention as well as the UNCITRAL Model Law. It A also recognises the territorial principle which gives effect to the sovereign right of a country to regulate, through its national courts, an adjudicatory duty being performed in its own country. By way of a comparative example, we may reiterate the observations made by the Court of Appeal, England in C v. D [2008 Bus LR B 843 : 2007 EWCA Civ 1282 (CA)] wherein it is observed that: “It follows from this that a choice of seat for the arbitration must be a choice of forum for remedies seeking to attack the award.” In the aforesaid case, the Court of Appeal had approved the observations made in A v. B [(2007) 1 All ER (Comm) 591 : (2007) 1 Lloyd’s Rep 237] wherein it is observed that: “… an agreement as to the seat of an arbitration is analogous to an exclusive jurisdiction clause. Any claim for a remedy … as to the validity of an existing interim or final award is agreed to be made only in the courts of the place designated as the seat of arbitration.”

39Copy pinpoint39. The Court then concluded in paragraph 194 as follows:

194. In view of the above discussion, we are of the considered opinion that the Arbitration Act, 1996 has accepted the territoriality principle which has been adopted in the UNCITRAL Model Law. Section 2(2) makes a declaration that Part I of the Arbitration Act, 1996 shall apply to all arbitrations which take place within India. We are of the considered opinion that Part I of the Arbitration Act, 1996 would have no application to international commercial arbitration held outside India. Therefore, such awards would only be subject to the jurisdiction of the Indian courts when the same are sought to be enforced in India in accordance with the provisions contained in Part II of the Arbitration Act, 1996. In our opinion, the provisions contained in the Arbitration Act, 1996 make it crystal clear that there can be no overlapping or intermingling of the provisions contained in Part I with the provisions contained in Part II of the Arbitration Act, 1996.

40Copy pinpoint40. A reading of paragraphs 75, 76, 96, 110, 116, 123 and 194 of BALCO (supra) would show that where parties have selected the seat H

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A of arbitration in their agreement, such selection would then amount to an exclusive jurisdiction clause, as the parties have now indicated that the Courts at the “seat” would alone have jurisdiction to entertain challenges against the arbitral award which have been made at the seat. The example given in paragraph 96 buttresses this proposition, and is supported by the previous and subsequent paragraphs pointed out B hereinabove. The BALCO judgment (supra), when read as a whole, applies the concept of “seat” as laid down by the English judgments (and which is in Section 20 of the Arbitration Act, 1996), by harmoniously construing Section 20 with Section 2(1)(e), so as to broaden the definition of “court”, and bring within its ken courts of the “seat” of the C arbitration1.

41Copy pinpoint41. However, this proposition is contradicted when paragraph 96 speaks of the concurrent jurisdiction of Courts within whose jurisdiction the cause of action arises wholly or in part, and Courts within the jurisdiction of which the dispute resolution i.e. arbitration, is located.

42Copy pinpoint42. Paragraph 96 is in several parts. First and foremost, Section 2(1)(e), which is the definition of “Court” under the Arbitration Act, 1996 was referred to, and was construed keeping in view the provisions in Section 20 of the Arbitration Act, 1996, which give recognition to party autonomy in choosing the seat of the arbitration proceedings. E Secondly, the Court went on to state in two places in the said paragraph that jurisdiction is given to two sets of Courts, namely, those Courts which would have jurisdiction where the cause of action is located; and those Courts where the arbitration takes place. However, when it came to providing a neutral place as the “seat” of arbitration proceedings,

F 1 Section 3 of the English Arbitration Act, 1996 defines “seat” as follows: “In this Part “the seat of the arbitration” means the juridical seat of the arbitration designated— (a) by the parties to the arbitration agreement, or (b) by any arbitral or other institution or person vested by the parties with powers in that regard, or (c) by the arbitral tribunal if so authorised by the parties, G or determined, in the absence of any such designation, having regard to the parties’ agreement and all the relevant circumstances.” It will be noticed that this Section closely approximates with Section 20 of the Indian Arbitration Act, 1996. The meaning of “Court” is laid down in Section 105 of the English Arbitration Act, 1996 whereby the Lord Chancellor may, by order, make provision allocating and specifying proceedings under the Act which may go to the H High Court or to county courts.

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[R. F. NARIMAN, J.]

the example given by the Five Judge Bench made it clear that appeals under Section 37 of the Arbitration Act, 1996 against interim orders passed under Section 17 of the Arbitration Act, 1996 would lie only to the Courts of the seat - which is Delhi in that example - which are the Courts having supervisory control, or jurisdiction, over the arbitration proceedings. The example then goes on to state that this would be irrespective of the fact that the obligations to be performed under the contract, that is the cause of action, may arise in part either at Mumbai or Kolkata. The fact that the arbitration is to take place in Delhi is of importance. However, the next sentence in the said paragraph reiterates the concurrent jurisdiction of both Courts.

43Copy pinpoint43. This Court has held that judgments of Courts are not to be construed as statutes, neither are they to be read as Euclid’s theorems. All observations made must be read in the context in which they appear. This was felicitously put in Amar Nath Om Prakash v. State of Punjab (1985) 1 SCC 345, where this Court stated: “10. There is one other significant sentence in Sreenivasa D General Traders v. State of A.P [(1983) 4 SCC 353 : AIR 1983 SC 1246] with which we must express our agreement, It was said: (SCC p. 377, para 27) “With utmost respect, these observations of the learned Judge are not to be read as Euclid’s theorems, nor as provisions of a E statute. These observations must be read in the context in which they appear.” We consider it proper to say, as we have already said in other cases, that judgments of courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, F it may become necessary for Judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes. G In London Graving Dock Co. Ltd. v. Horton [1951 AC 737, 761 : (1951)-2 All ER 1, 14 (HL)] Lord MacDermott observed: “The matter cannot, of course, be settled merely by treating the ipsissima verba of Willes, J., as though they were part of an Act of Parliament and applying the rules of interpretation H

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